The New Republic

The New Republic

A Corporate Bully Got the "Bargain of the Century" Thanks to This GOP Senate Candidate

AP Photo/Carlos Osorio

Not so long ago, a major retailer tried secretly to overthrow the government of a small town in the cherry-growing reaches of northern Michigan. It was caught in the act—but let off the hook without serious repercussions by a state official who had received large campaign contributions from the company. And now that state official is in a close race for the U.S. Senate, getting more financial support from the company’s executives—and no questions about the episode.

It’s a remarkable tale of corporate might and small-town democracy in the Citizens United era, which I wrote about for Harper’s magazine in 2012. Meijer, Inc.—a family-owned, Grand Rapids–based chain of grocery and discount general merchandise big-box stores with more than 200 branches and 75,000 employees across the Midwest and $14 billion in revenue—wanted to build a new store as part of a massive new development in a hay field in Acme, a town of 4,375 people just northeast of Traverse City. Townspeople balked at the scale of the proposed project and in 2004 elected a new town board that sought a redrawing of the plans. Meijer sued the new board members individually for unlimited damages, claiming that they had a conflict of interest because they had previously belonged to a local citizens group opposed to the project. The board members stood firm—and one of them, a conservative outdoorsman, fired back with a lawsuit of his own, starting an extended legal battle that had Meijer and its allies haggling with him in court until his death from cancer in 2011.

Meanwhile, in late 2006, Meijer began secretly bankrolling a campaign to replace the town board in a recall election. It paid a public relations firm in Grand Rapids to run the very elaborate, months-long campaign, which was made to appear as if it was being led by a handful of pro-Meijer residents in Acme. The p.r. firm developed voter lists, created a Web site, composed campaign literature, and edited letters to the editor. (A few decisions were left up to the locals: one draft of a letter to voters that was written by the p.r. firm was signed, “Acme Citizens Who Care Committee (or whatever ballot committee name you choose.”) The recall fell short, and a year later, the ruse was exposed, thanks to the lawyer of the board member who filed suit against Meijer and aggressive reporting by the Traverse City Record-Eagle—which was punished with the loss of more than $250,000 in annual revenue when Meijer, its largest advertiser, yanked its Sunday ad circular.

Meijer went into damage-control mode, admitting that it had spent tens of thousands of dollars directly on the recall race and on an earlier Acme referendum on a big-box development moratorium, in which Meijer had narrowly prevailed. The spending had not been disclosed, as the law required, and the spending in the recall campaign was a clear violation of Michigan’s law banning direct corporate spending on campaigns. “We apologize for the violation of trust these actions caused,” the company said.

Grand Traverse County prosecutor Al Schneider, a straight-shooting Republican, opened an investigation into felony violations of campaign finance law, which would have allowed him to subpoena Meijer executives, including co-chairman Hank Meijer, the grandson of its founder. But in May 2008, the company reached a “conciliation agreement” with Michigan’s secretary of state. The company agreed to pay the state $190,138 in fines for its spending on the two elections, which the state determined had totaled more than $100,000. The agreement’s crucial line, though, was on its last page: the fine would “constitute a complete bar to any further action against Meijer, Inc.”

The secretary of state who arrived at that agreement was Terri Lynn Land, a Republican who had received considerable campaign contributions from Meijer family members, executives, and the company PAC. The Acme board members had been so worried about Land’s ability to be impartial in the matter that in the weeks leading up to the announcement that their lawyer, Chris Bzdok, had been urging her to pass the case off. The county judge who had been overseeing the case had urged her to refer the matter to the state attorney general, Republican Mike Cox, for further investigation. Schneider, the county prosecutor, wrote Land to say she could “prevent an unintended miscarriage of justice” by sending the case to Cox, who had promised to send it back to Schneider for criminal prosecution. Cox, who had himself received Meijer campaign contributions, including a $2,500 one from its PAC just a few weeks earlier, professed his surprise when Land chose otherwise and barred any further accountability. “The secretary of state never came to our office and talked to us one iota about this,” Cox told the Grand Rapids Press. “Let’s be clear about this: This was something the secretary of state’s office did on their own….We would have said, ‘Let us look at things before you start signing away options.’ ... I’m just dumbfounded by what happened.”

Bzdok, the town board’s lawyer, told me this week that Land’s move still rankles. “We wrote her a letter saying, ‘We know you’re going to do this, don’t do it, and then she did it. It was a fix. It was about putting enough dollar zeroes in the fine that it would provide her with political cover to let them off the hook of any criminal investigation of violations of election law. That’s an ethically questionable move for the darkest corporate attorney, but she was the chief election-law enforcement official in Michigan … and she did the opposite of what her oath required her to do.”

Ron Hardin, who was one of the board members sued by Meijer and who works for a business that makes fire-suppression equipment, is just as outspoken in hindsight about Land’s agreement with Meijer. “It was pretty much a total betrayal,” he said. “The whole point was to watch this go through the justice system....When she levied the fine, it was [Cox’s] excuse not to pursue it. It allowed everyone to walk away. As big as the fine was, for Meijer it was just peanuts.”

Land’s campaign and Meijer both did not respond to requests comment for this piece.

Schneider, the prosecutor, refused to let Land’s agreement stop him, arguing up through the Michigan courts that she could not block a district attorney from investigating criminal violations. But his appeals dragged out, and eventually he found himself undermined by a much higher authority—the Supreme Court’s Citizens United ruling of 2010, which ruled that direct corporate spending on elections was protected under the First Amendment, thus deeming unconstitutional the Michigan law Meijer had violated.

Incredibly, after all this, Meijer pushed forward with its plans for the store in Acme, which the board finally had no choice under zoning laws but to approve more or less as Meijer wanted. Construction is now underway, and it has already twice spilled plumes of clay-laden sediment into nearby Acme Creek and Grand Traverse Bay, an inlet of Lake Michigan, despite the company’s prior assurances to the contrary.

Meanwhile, in her race for U.S. Senate, Land is running just a few points behind Democratic Congressman Gary Peters, forcing Democrats to devote more resources to a seat they assumed would be fairly safe. No one in Michigan’s press corps—which has been as decimated as those in most other states—has challenged her about her role in the Meijer case. This, despite the fact that she has received the maximum $5,200 individual contribution from Hank Meijer, his wife, and the company's former president, support that further suggests that the company did not find the fine she levied against it particularly onerous.

“As a get out of jail free card, it was the bargain of the century,” says Bzdok. “She could not have made a better deal for criminal immunity. They were able to buy that with a check that’s relatively small in the general scheme of things … and now they’re paying it back.”